Updated Aug 7 at 11:19am ET.
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The U.S. economy lost 23,000 jobs in July, a surprise drop when analysts were expecting gains. This matters because the company earns a fee every time a bank pulls a credit score to approve a mortgage, car loan, or credit card. If fewer people are working, fewer people tend to apply for new loans.
While the company has a lot of power to raise its prices, it still needs people to keep borrowing money to maintain its growth. If this job loss is the start of a broader slowdown in the economy, it could lead to a drop in the number of scores banks need to buy.
Source: Bloomberg Markets and Finance
Jefferies lowered its price target from $1750 to $1675. This is a relatively small adjustment that still sits well above the current stock price. It likely reflects a slight recalibration of expectations after the recent quarterly results, rather than a change in the firm's view of the company's long-term potential.
Source: Jefferies
The stock saw its worst single-day drop in over a year after the company provided a financial outlook, or guidance, that came in below what Wall Street was expecting. While the company is still growing, this lower forecast suggests that the pace of growth might be slowing down more than people had anticipated.
For a company that trades at a high price relative to its earnings, even a small disappointment in future expectations can lead to a sharp drop in the stock price. This move reflects the market adjusting to a slightly less aggressive growth path for the coming months.
Source: Barrons
RBC Capital lowered its price target from $2400 to $1525, a drop of about 36 percent. While the firm kept its positive rating, this is a major adjustment to what they believe the stock is worth in the near term. It suggests that the extremely high growth expectations previously baked into their model have been brought back down to earth after the company's recent outlook.
Source: RBC Capital
The company reported third-quarter revenue of $674 million, up about 26 percent from the $536 million it brought in during the same period last year. Profit also grew significantly, with earnings per share reaching $12.18, which was higher than the $11.76 that analysts were expecting.
This growth shows the company is successfully using its pricing power in its scoring business while also expanding its software platform. Cash flow from operations, which is the actual cash the business generates from its day-to-day work, rose to about $380 million. This ability to turn high profits into actual cash is a hallmark of the company's toll-bridge business model.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Analysts adjusted their price targets following the company's recent earnings report. Most analysts, 16 of 19, rate the stock a buy, and the average target of $1581 suggests a 51% increase from today's price.
The company has a very consistent habit of beating expectations, often by a wide margin. This suggests management is conservative with its targets and the business is performing better than even bullish analysts expect.
| Expectation | |
|---|---|
| EPS | $11.08 |
| Revenue | $665M |
PRNewsWire · Press release · Aug 5
Barrons · Jul 30
Seeking Alpha · Opinion · Jul 29
Business Wire · Press release · Jul 29
Business Wire · Press release · Jul 27
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